A zero-carbon grid for Ontario would require massive investment and increased costs, the report finds | Daily News Byte

A zero-carbon grid for Ontario would require massive investment and increased costs, the report finds

 | Daily News Byte


A report by the Independent Electricity System Operator of Ontario concluded that creating a net-zero grid by mid-century would nearly triple annual costs to roughly $60 billion, compared to $20 billion today.Nathan Denette/The Canadian Press

Ontario’s emissions-free electricity grid — one that could support the mass adoption of electric cars and heat pumps — would cost three times more each year than what the province pays today, the body that coordinates the province’s electricity system said Thursday.

In a report responding to Energy Minister Todd Smith’s questions about the future of Ontario’s grid, the Independent Electricity System Operator (IESO) concluded that achieving a net-zero grid by mid-century would require about $400 billion in new infrastructure, not I mention a lot of land. Annual costs would be roughly $60 billion, compared to $20 billion today. The amount of electricity produced would double, displacing the use of gasoline, natural gas, and other fossil fuels.

“Achieving a net-zero economy driven by an emissions-free electricity system will involve huge investments in new infrastructure and increased costs,” the report concluded.

“It will be vital that this transition is managed prudently so that costs do not discourage electrification, negatively impact the economy or unduly burden low-income people.”

The IESO said Ontario could impose a moratorium on new natural gas plants starting in 2027. But the province would have to acquire new zero-emissions generation capacity, including small modular reactors and solar farms, increase its energy efficiency efforts and spend up to 2, $1 billion in new transmission infrastructure – all of which would lead to higher electricity bills.

The organization has already announced plans to procure up to 1,500 megawatts of gas capacity to be included in the grid over the next few years.

“Natural gas provides flexibility,” IESO Vice President Chuck Farmer told reporters during a briefing. “It’s available when the temperatures are high and the demands are particularly high, or in extremely cold weather, or when we have other issues in the fleet that require us to speed something up very quickly.”

The IESO’s vision for continued reliance on natural gas conflicts with that of the federal government, which has proposed a complete decarbonization of Canada’s electricity system by 2035. For the purposes of its analysis, the IESO assumed that in 2035 Ontario would still have 7,840 megawatts of gas-fired capacity, smaller than today’s 10,000 megawatts.

Its findings also rebuke research from some independent bodies that say Ontario can and should meet the federal target.

One such report was published at the end of last month by Power Advisors, a consulting company, and was commissioned by the Atmospheric Fund. It concluded that Ontario’s plan to expand natural gas production would increase emissions from the grid by 260 percent by 2040. Furthermore, it found that a combination of solar and wind generation, along with storage and energy efficiency initiatives, would be more affordable and could keep rates flat to what Ontarians are paying today. Existing gas plants would be used only sparingly.

Brian Purcell, vice president of policy and programs at TAF, said the new gas plants could have a short life.

“Based on current federal regulations, they may be required to close in 2035, which could be eight years after they were built,” he said. “The IESO promises that the ratepayers and ratepayers will absorb the cost if it comes to that.”

Carolyn Kim, senior director of communities and decarbonization at the Pembina Institute, said in a statement that the IESO underestimated how reliable clean generation assets can be and overestimated the competitiveness of natural gas.

The IESO, however, assumes that gas plants will continue to operate for up to 25 years – and that existing gas plants must continue to operate, in part because new transmission infrastructure cannot be completed until 2035 in the Toronto and York region.

The IESO also doubled nuclear reactors, the traditional workhorses of Ontario’s grid. To reach net zero by 2050, Ontario needs to build an additional 17,800 megawatts of nuclear generating capacity, it is estimated. That’s the equivalent of about 60 small modular reactors of the kind Ontario Power Generation proposes to build at its Darlington nuclear power plant by 2028 — the only new reactor currently planned in the province. If that were to happen, Ontario’s reactor fleet would be three times larger than it is today by mid-century.

Ontario is scrambling to acquire new generation capacity to fill the looming shortage. In its latest annual assessment of grid reliability across the continent released Tuesday, the North American Electric Reliability Corporation (NERC) identified Ontario as one of a handful of high-risk jurisdictions that could soon experience power shortages even under normal conditions. NERC projects a shortfall of 1,700 megawatts in Ontario for 2025 and 2026.

“Ontario doesn’t have enough firm capacity in their future years starting in 2025,” Mark Olson, senior reliability assessment engineer at NERC, told reporters. The firm’s capacity refers to the energy that is guaranteed to be delivered by contract.

“Mostly, it stems from planned nuclear operation as well as planned retirement” of generating facilities.

But natural gas contributes to Ontario’s energy security. According to NERC, Ontario receives gas from neighboring jurisdictions through trunk and distribution utilities. Many of its natural gas facilities are close to a large underground natural gas facility operated by Enbridge, known as the Gas Dawn Hub, which reduces the risk of gas becoming unavailable during extremely cold conditions.

“Ontario’s natural gas fleet supply is strong and supported by significant firm supply and transportation contracts,” the NERC report said.


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